Wednesday, December 19, 2012

Morning Market Analysis

The German market consolidated between 22.5 and 23.5 (not including a quick dip to the 200 day EMA) for about three months. Now prices have broken through upside resistance at the 23.5 area and are inching higher. The underlying technicals -- the EMAs, MACD and CMF -- all confirm the move higher

Both the Singapore market (top chart) and Taiwan market (bottom chart) have dropped sharply. The Singapore market did so yesterday -- dropping to the 10 day EMA -- while the Taiwan market started to do so a few days ago and is now through the 20 day EMA. The Singapore sell-off occurred on weaker volume, but the Taiwan sell-off is on high volume.

For the last six months, the Japanese market has been one long consolidation pattern between 8.75 and 9.50. However, with the new government taking over, prices are right at upside resistance and may be ready for a break out.

Over the last few days, I noted that the TLT's had broken support. Now the TLH's have followed suit, making their 200 day EMA the next logical target.

The IYTs (transports) have broken through upside resistance. This could have significant bullish potential for the markets as a whole (Thanks to a specific reader for pointing this out).